The Bureau of Land Management's (BLM) Utah office held its controversial oil and natural gas lease sale Friday, but it was marred by an alleged "nuisance" bidder who apparently tried to taint the bidding process.
A man referred to as "bidder No. 70" apparently was being questioned by the FBI after he was discovered "buying" more than 10 of the leases being auctioned, worth an estimated $5 million. BLM officials declined to comment, but the Associated Press said the man, called a "nuisance" bidder by BLM, apparently did not intend to purchase the leases, and he only wanted to discourage other bidders.
BLM reported that 116 of 131 parcels offered were sold at the auction Friday. The average bid per parcel was $55,225. The highest bid was for $592,650, which was made by Enduring Resources LLC of Denver.
After security detained the nuisance bidder, BLM officials had been trying to decide whether to reoffer the parcels that apparently had been falsely purchased.
"This is a highly unusual situation," BLM spokeswoman Terry Catlin said of the nuisance bidder. She told the Salt Lake Tribune that BLM did not like to reauction parcels without adequate "competition" present." The BLM Utah office also received some threatening e-mails about the auction, but Catlin declined to offer details.
Hundreds stood outside BLM's Utah offices in Salt Lake City Friday to protest the scheduled auction. Environmental groups filed a lawsuit on Wednesday to block the sale of 80 blocks that were set for auction on 164,000 acres in eastern Utah (see Daily GPI, Dec. 18). BLM initially proposed auctioning 241 parcels on 359,450 acres, but the federal agency removed more than half of the offering following protests. It also had deferred leasing in other disputed areas (see NGI, Dec. 15).
However, under an agreement reached with the environmental groups, the Interior Department, which oversees BLM, agreed to not finalize any leases on the 80 parcels considered environmentally sensitive. The 80 parcels include areas adjacent to national parks in the state. The agreement was filed in U.S. District Court for the District of Columbia, and it gives U.S. District Judge Ricardo Urbina nearly a month to consider whether to block some of the leases sold.
"Anyone buying them at Friday's sale will be proceeding at their peril," said Sharon Buccino, senior attorney at the Natural Resources Defense Council (NRDC). The NRDC is one of the groups challenging the sale.
Amid tight security, BLM had said there were around 100 people at the auction Friday. In a statement posted on BLM's Utah website, State Director Selma Sierra said that only 6% of the lease parcels would even be developed because of the "costly and speculative" nature of the business. "Facts of the lease sale have been mischaracterized in the public forum, sowing confusion and misunderstanding," she wrote.
The results of Friday's auction are posted at www.blm.gov/ut/st/en.html under "Results of Utah BLM Quarterly Oil and Gas Lease Sale."
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